OLAF STUBS OUT ILLEGAL TRADE IN CIGARETTE LIGHTERS

OLAF /07/01 Brussels, 30 January 2007

A scheme of illegal trade in cigarette
lighters from Asia, with a financial
impact for the European Community
budget of at least 20 Million Euros
in evaded duties, has been detected
by the European Anti-Fraud Office
(OLAF) in co-operation with its partners
in the EC Member States. OLAF and
the national authorities are currently
investigating several cases of illegal
imports of non-refillable lighters
of Chinese origin, falsely declared
as originating in Indonesia or Malaysia.
The joint investigations have revealed
that Malaysia alone was used for
transhipments of more than 300 million
lighters from China during the past
four years. If these cases had not
been detected the cost to the Community
budget, which will now be recovered
from the importers, would have been
borne by the Community taxpayers.

The total consumption of non-refillable lighters in the EU is estimated at 1
billion per year, at consumer prices ranging
from 50 cents upwards. Imports of non-refillable
lighters from China to the EU are liable
to an Anti-Dumping Duty of 6.5 cents per
lighter. Investigating cases of evasion
of Anti-Dumping Duties is part OLAF’s task
in the fight against fraud affecting the
EU budget and in protecting the Community
taxpayer.

OLAF,
together with its national partner services
in the Member States, has detected several
cases where Indonesia or Malaysia was fraudulently
declared as the country of origin of the
imported lighters. The investigation of
these cases will lead to the recovery of
duties and the potential criminal investigation
by the national authorities of offenders
in the Member States concerned, namely
the UK, Czech Republic, Lithuania, Italy,
Spain and Germany. In the framework of
its investigations, OLAF has also worked
closely with the industry producing lighters
in the EC.

Malaysia
case

The
investigation of the imports of lighters
falsely declared as of Malaysian origin
has been the most spectacular so far: The
joint verification conducted by OLAF in
Malaysia, together with the customs authorities
of Germany, UK, Italy and the Czech Republic
and with the support of the competent national
Malaysian authorities, revealed that in
the past four years more than 300 million
flint-operated lighters from China have
passed through Malaysia. They were solely
transhipped in order to disguise the true
Chinese origin of the goods.

It
has been established that the Malaysian
company which claimed to have produced
the lighters merely provided cover for
the transhipped goods. Hundreds of container
loads of Chinese lighters were switched
in the commercial free-zones in Port Klang,
Penang and Johor Bahru. By providing false
information to the local authorities the
parties involved succeeded in obtaining
certificates of Malaysian origin in order
to bypass the anti-dumping measures.

For
this case alone OLAF and its partners investigated
more than 300 containers which had been
transhipped in this way. One container
carries around one million lighters resulting
in a revenue loss of 65,000 Euros per container

Indonesia case

There
was a further joint verification mission
conducted in Indonesia in late November
2006 with the full support and cooperation
of the Indonesian national authorities
into the alleged production there of flint-operated
lighters exported to the European Community.
On that occasion it had been jointly established
by both parties that more than 100 consignments
under investigation did not originate in
Indonesia. Further investigations into
the true origin of the goods are foreseen
for the near future. All the containers
of Chinese lighters had been routed via
Hong Kong and were switched in Singapore,
which is frequently used by fraudulent
operators as a hub for this kind of activity.